Signs of recovery in the handset market

Natalie Apostolou
03 Nov 2009
Daily News

The global handset market is showing slow signs of a recovery according to the latest research and may turn the corner in Q4.

IDC 's Worldwide Mobile Phone Tracker revealed that year-on-year growth remained negative, but improved from the first half of 2009.

Asia Pacific, however, was weaker than anticipated, with total shipments down slightly from a year ago. Even key emerging markets, including China, India, and Indonesia, all posted slight declines, signaling that recovery may take longer than expected.

Mobile phone shipments totaled 287.1 million units worldwide in 3Q09, down 6.0% from a year earlier, but up 5.6% from the second quarter.

“The mobile phone market is showing the first signs of improvement since the onset of the economic crisis,” said IDC's Mobile Devices Technology and Trends team, senior research analyst Ramon Llamas.

“During the third quarter, we saw a number of channels promoting older devices at significantly lower prices. For many, this was enough to spur demand and push volumes higher. Now that we have moved into the fourth quarter, vendors are setting the stage for further gains by launching their flagship devices to meet pent-up demand.”

During Q3 the US posted positive results, with converged mobile devices and prepaid handsets driving growth, however the Canadian mobile phone market declined for the third straight quarter despite double-digit converged mobile device growth.

The western European market showed a clear upward turn with both traditional mobile phone and converged mobile device shipments increasing YoY and sequentially.

Meanwhile a report from Strategy Analytics claims that the global handset market will swing into positive growth during the fourth quarter. Strategy Analytics forecast that global shipments in the final quarter of 2009 will rise 3% from the previous year to reach 300 million units.

“We believe this will be the first time the industry has returned to positive growth since Q3 2008, signaling an end to the handset recession after four quarters of decline,” it said.

Another study, by ABI Research, predicts that 2009 should close out with only a 4%-5% contraction in the sector, closing the gap on Q3’s YoY 6.5% contraction in shipments to 291.1 million.

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